Fixer uppers

Discussion in 'Renovation & Home Improvement' started by hillsguy, 19th Aug, 2005.

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  1. hillsguy

    hillsguy Well-Known Member

    15th Aug, 2005
    Just curious if anyone is currently undertaking any fixer upper projects in Sydney in the current climate ?

    In particular I am interested in hearing about experiences where people have purchased a home, completed renovations and then sold within a short timeframe. Effectively making this task their main source of income.

    I have always been tempted to tackle such a challenge ...
  2. Jacque

    Jacque Jacque Parker Premium Member

    16th Jun, 2005
    I'm not, and it's really only because of the market that we currently have. Buy Reno and Sells are best in a rising boom market, the type that we had back in 01-02, if you want to make a true gain. That's not to say, however, that it can't be done now in Sydney but it's harder to find that needle in the haystack :)
    There are so many variables and costs that you need to take into consideration (purchase costs, capital gains tax, holding costs whilst property is not receiving an income, renovation expenses, agent selling fees etc) that you want to be sure that you are making a lot of your profit well and truly when you buy.
    Buying under market value, after a heavy due diligence campaign, and renovating within a strict timeframe (to minimise holding costs) is essential to your bottom line. Remember too, that no discounts apply to capital gains tax if you onsell within a year. Holding the property for a minimum of 12 mths will see your tax bill halved, which could save you a significant amount, especially if you're fortunate enough to capture even more capital growth in that period.
    If you have the time, the ability to research, take your time in looking for that bargain (and they're out there!) know what features you're looking for as far as renovations go, and be realistic about your costs.
    Also look at finished properties (what you're aiming to achieve with your finished product) to ascertain what they're selling for, so that you start out with a clear idea of what profit you may end up with.
    Happy hunting!